There is growing evidence that the development of Type 2 diabetes is precipitated by alterations in the partitioning of fat between the adipose tissue vs. muscle, liver and pancreas. Intracellular accumulation of triglyceride and fatty acid metabolites leads to acquired insulin signaling defect and insulin resistance. One can, therefore, hypothesize that the inability of the adipose organ to expand to accommodate excess calories results in adipose tissue hypertrophy and Type 2 diabetes in predisposed obese subject. Such a hypothesis is now clearly supported by the following data: 1) Pima Indians with larger abdominal fat cells are more likely to develop diabetes than obesity-matched subjects with smaller fat cells; 2) thiazolidinediones improve insulin sensitivity by inducing adipocyte differentiation; 3) subjects with acquired total lipodystrophy (like fatless mice) are severely diabetic; 4) insulin sensitivity is inversely proportional to the triglyceride content of the muscle. In this application, we want to test the following hypotheses: 1) muscle lipid content correlates positively with abdominal subcutaneous adipocyte size in Type 2 diabetics and obesity-, sex-, and age-matched nondiabetics; 2) larger adipocytes are associated with greater weight loss and better improvement in insulin sensitivity after one year of intensive lifestyle treatment; 3) expression of genes involved in adipocyte proliferation and differentiation correlates negatively with adipocyte size in Type 2 diabetic and obesity matched non-diabetics. In response to weight loss, the expression of these genes will increase. To test these hypotheses we will perform the following studies: 1) determine the relationship between abdominal subcutaneous fat cell size (biopsy) and muscle fat infiltration (CT scan) in 100 subjects from Look AHEAD Trial and 50 non-diabetic matched for sex, race, age and BMI; 2) identify the effect of abdominal fat cell size on weight loss and improvement in insulin sensitivity (hyperglycemic clamp) after one year of intensive lifestyle treatment in the 100 subjects from the Look AHEAD Trial; 3) quantify in subcutaneous abdominal adipose tissue the expression of genes involved in adipocyte proliferation/differentiation in 100 Type 2 diabetic subjects and 50 non-diabetic subjects. Gene expression will also be measured in Type 2 diabetics after one year of intensive lifestyle changes.